BP’s Dudley meets FM, Moily over gas worries

Bob Dudley, the chief executive of global oil major BP, on Friday met senior economic ministers of the UPA government including finance minister P Chidambaram and petroleum and natural gas minister Veerappa Moily.

Moily told reporters that BP and Reliance plan to invest $8-10 billion (`49,020-61,270 crore) by 2016-17 in further development of the KG-D6 gas block.

It was not immediately clear if this was an additional investment or part of the existing budget for the block, where production has been dipping since 2010. In 2011-12, BP brought in the largest foreign direct investment in the oil sector.

Reliance Industries Ltd chairman Mukesh Ambani accompanied Dudley on his visit to Moily, but not to meet the finance minister later in the day. Dudley and Ambani were scheduled to meet the Prime Minister Manmohan Singh in the evening.

As per sources, both Dudley and Ambai voiced their concerns over the government’s proposed move to deny BP-RIL the benefit of the new price of natural gas, as they missed production targets in the KG-D6 gas fields.

The new gas price that comes into effect on April 1 next year is almost double the existing price of $4.2 per unit.

Dudley emphasised that his company was committed to staying invested in India despite regulatory uncertainties.

“Today I have met senior leaders in the government and discussed opportunities and challenges in the Indian energy sector at large and also specific to our deep water exploration and development projects,” Dudley said.

The directorate general of hydrocarbons (DGH) is seeking to strip the company of eight gas discoveries that hold 1.15 trillion cubic feet of reserves worth $14 billion (`85,778 crore) from their eastern offshore block in KG-D6.